A-LevelEconomicsGovernment microeconomic intervention9708/12 · Feb/Mar 2025 · Q131 Mark
To help achieve price stability, the government in country F operates a buffer stock scheme, with a minimum price of P₁ and a maximum price of P₂. The current demand and supply in the market is shown. [Figure showing a demand and supply curve, with prices P1, P2 and quantity points G, H, D, L, K, J] What should the government do to ensure the scheme is effective?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
Abuy an amount equal to GH
Bbuy an amount equal to KJ
Cbuy an amount equal to LJ
Ddo nothing as the equilibrium price is below P₁
✓ Correct answer
C: buy an amount equal to LJ
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